Stanford to divest its endowment from coal stocks

A one off, or the start of a trend?

Stanford University has announced that it is pulling its endowment out of investments in any of 100 publicly traded companies that are focused on extracting coal. No future investments will be made in any of those companies, and the university will instruct the managers that run its non-endowment investments to avoid these stocks as well.

The move's immediate trigger was a report by an investment advisory panel, which acknowledged some basic features of coal power: it releases more carbon dioxide per unit of electricity than any other fossil fuel, and those emissions are contributing to climate change. The panel also noted that lower-carbon alternatives are available. But it drew the line at coal; renewable technologies aren't yet available to be rolled out on a sufficient scale to allow Stanford to go fossil free.

Fossil Free Stanford (FFS) is the name of the group that put the issue on the map, and it's acknowledged in the university's announcement. FFS is part of a cross-campus effort at divestment happening on over 400 college campuses, possibly modeled on the successful campaign to get universities to divest from companies that did business in South Africa during the apartheid era.

University endowments can run in the billions of dollars—Stanford's was $18.7 billion as of last August. Should Stanford's move be part of a larger trend, it could put a bit of financial pressure on companies that make most of their money in coal. It won't be enough to force anyone to stop mining it, but it'd possibly be enough to make mining a bit more financially challenging to do.